GM's Ignition Recall and Its Impact on Used Vehicle
Prices

WASHINGTON -- June 26, 2014: Auction sales data
indicates that General Motor's well-publicized recall of approximately 2.6
million vehicles for faulty ignition switches has done little to affect
used vehicle prices, says NADA Used Car Guide.

Initially announced on Feb. 10, GM's recall addresses defective ignition
switches that could inadvertently be switched off due to weight on the key
ring or jarring road conditions, factors that could cause the engine to
shut off and prevent airbag deployment in the event of a crash. The recall
covers Chevrolet Cobalt and HHR, Pontiac G5 and Solstice, and Saturn Ion
and Sky models produced for model years 2003 – 2011.

"Chevy Cobalt prices have continued to move in a manner similar to
competitive models within the compact car segment," says Executive
Automotive Analyst, Jonathan Banks. "Cobalt prices haven't declined any
more dramatically than those of the Dodge Caliber or Ford Focus."

On a sales weighted basis, prices of 2005 – 2010 Chevy Cobalts
fell by 9.4% from March to June. By comparison, overall compact car segment
prices declined by 10.6%. Prices for Chevy's recalled HHR fell by a smaller
6.9% over the period.

It's possible that the older age of GM's recalled models, which range in
age from 4 – 11 years old, is helping to prevent a distinct decline
in prices.

"So far, price movement of GM models recalled for faulty ignition
switches has been more-or-less consistent with recalls of older models in
the past." For example, used prices weren't materially affected when Ford
recalled approximately 4.5 million vehicles ranging from 7 – 17 years
in 2009 to address faulty cruise control devices that could overheat, smoke
or burn.

By comparison, used Toyota prices suffered when the automaker issued a
series of recalls related to unintended acceleration between Nov 2009 and
Feb 2010. Nearly 8 million vehicles were recalled in the U.S. covering a
wide range of younger models aged between 1 – 6 years old.

The impact of Toyota's recalls on prices of its used vehicles was
clearly evident at the start of 2010. Toyota prices bottomed out by April,
within two months of issuing the last recall related to the matter. NADA
estimates that at its lowest point, Toyota lost roughly 40% of the price
advantage it had held over its competitors prior to the recalls.

"At this point we've observed nothing to indicate that similar movement
is occurring on affected GM models".

Information contained on GM's web site dedicated to the ignition recall
states that 236,437 vehicles have been repaired as of June 24, 2014. GM is
urging owners to remove everything from their key rings with the exception
of the car key until the vehicle has been repaired. Additional information,
including GM dealer locations and contact information, can be found at GM Ignition Update.